As President Trump pushes his massive global tariffs into effect, America’s former trading partners are designing their own, retaliatory tariffs, that are sure to have a walloping effect on Americans’ pocketbooks.
On Thursday, the recently elected prime minister of Canada, Mark Carney, announced a new 25 percent tariff on American-made automobiles. The tariffs will apply to all vehicles that do not comply with the USMCA, the trade agreement between Canada, Mexico, and the U.S. that was signed into law several years ago. The tariffs don’t apply to car parts, however. Carney said he thought Canada would earn approximately $5.7 billion from the new measures.
Canada and Mexico were exempted from the far-reaching tariffs that Trump announced earlier this week (dubbed “reciprocal” tariffs) which are aimed at dozens of countries all over the world. However, tariffs instituted earlier this year remain in effect for both of the nations. Trump levied multiple tariffs on Mexico and Canada in February, including on Canada’s steel and aluminum, and on Canadian exports.
“Our response to these latest tariffs is to fight, to protect, and to build,” Carney said, during a press conference. “We will fight the U.S. tariffs with retaliatory trade actions of our own that will have maximum impact in the United States and minimum impacts here in Canada.”
“We take these measures reluctantly,” Mr. Carney told reporters. He went on: “We can do better than the United States. Exactly where that comes out depends on how much damage they do to their economy.”
Carney took the opportunity to point out that Trump was effectively violating the trade agreement that his own administration had negotiated during his first term in office. Indeed, the USMCA was put into place in 2020. Carney also predicted that Trump’s trade war would hurt Americans so much that the tariffs would ultimately be rescinded.
“Given the prospective damage to their own people, the American administration should eventually change course,” Carney said. “Although their policy will hurt American families until that pain becomes impossible to ignore, I do not believe they will change direction, so the road to that point may indeed be long. And will be hard on Canadians just as it will be on other partners of the United States.”
Carney also spoke pessimistically about U.S.-Canadian relations: “The global economy is fundamentally different today than it was yesterday. The system of global trade anchored on the United States… is over. Our old relationship of steadily deepening integration with the United States is over. The 80-year period when the United States embraced the mantle of economic leadership…is over.”
“This is a tragedy,” he added. “It is also the new reality. We must respond with both purpose and force.”
